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What is flood cover?

Flood cover provides insurance coverage for losses to your property or contents caused by flooding and rainwater run-off. This type of cover isn’t always included under a home and contents insurance policy but can usually be added as an optional extra. However, some properties in certain areas may be deemed uninsurable for flood damage due to a high-risk of flooding.

When comparing home and contents insurance with Compare the Market’s free comparison service, you’ll be able to see which policies include flood insurance when comparing results.

How to add flood cover to your home and contents insurance

Flood cover is not often an automatic inclusion in home and contents insurance, so you may need to select it as an optional extra or contact your insurer to add it on. However, this does mean there may be a slight increase to the price you pay for insurance.

You might find that a condition of flood cover is that you won’t be able to claim for a period (usually the first 72 hours after purchasing). So, if you take out cover while a storm is brewing and a flood warning is active, your insurance claim will most likely be rejected.

What does home and contents insurance with flood cover include?

Put simply, flood cover can cover homes for damage and loss caused by flood events. Your exact level of coverage will depend on your insurer and home and contents insurance policy.

The inclusions and exclusions shown below will give you an idea of how flood cover can protect your home and belongings with a home insurance or contents insurance policy. These benefits are a guide and are subject to the policy’s terms and conditions. As always, be sure to thoroughly check a policy’s Product Disclosure Statement (PDS) and Target Market Determination (TMD) before purchasing cover.

Remember, a combined home and contents insurance policy will generally have all the inclusions and exclusions listed below together in one policy.

Home insurance with flood cover

Loss or damage to your building (home) resulting from:

Loss or damage caused by actions of the sea (e.g. tsunami, high tides, rise in sea levels).

Contents insurance with flood cover

Loss or damage to your home and contents caused by:

These events are covered if the damage was caused directly by or happened immediately after floods.

Loss or damage caused by:

Loss or damage to:

man checking flood insurance coverage over phone

What to look for in flood cover

It’s vital to check the exact wording of a policy and the definition of flood the insurer uses. Some Australian insurers have slightly different wording on what causes a flood, which could impact potential insurance claims depending on the scenario.

Check which situations the insurer will pay for flood damage. For example, many insurers define a flood as water that has escaped the normal confines of a lake, river, catchment, reservoir, dam or other body of water specified by the policy. Storm surges, cyclones or torrential rains are some reasons why this could happen.

How do I know if I live in a flood zone?

Before you purchase a home and contents policy, it’s a good idea to find out whether your property is located in a flood risk zone. This is because living in a flood zone can affect your insurance premiums, and you could potentially be ineligible for flood cover because of the increased risk.

You can find out about flood zones in your area by contacting your local council for flood maps. These flood maps will show you high-risk zones as well as historical flooding in your area.

How can I find out whether I’m covered for a flood?

Many insurers don’t include flood cover as a standard part of a home and contents policy. However, they may instead offer this as optional cover. To find out if you’re covered for a flood, check your policy’s Product Disclosure Statement (PDS) to see if flood damage is listed as an inclusion or benefit. A home and contents policy typically lists events it doesn’t cover as exclusions.

Remember that flood risk can be reflected in the cost of your home and contents premium. For example, if you own a home in a flood-prone area, you will typically pay a higher premium than homeowners outside of a flood-prone area.

Frequently asked questions

How is a flood defined?

The definition of a flood in Australia is the covering of dry areas by water escaping from a natural watercourse such as a lake, river or creek, or an artificial body of water like a reservoir, canal or dam.

In 2011 the Australian Government established a standardised definition of floods for flood cover under specific insurance policies (such as home and contents insurance). This definition forms the basis for how insurance companies define a flood event.1

Other types of water damage, such as inundation after heavy rains or burst pipes, are usually not considered a flood but may be covered anyway under a different type of event listed in the policy. This is why it’s vital to review the PDS so you understand what is covered by your policy.

Should I get flood cover with my home and contents insurance?

You may be covered for storms, cyclones or bushfires, but you likely won’t be covered for floods. A few centimetres of water can wreak havoc to your home and everything inside it. Even a small flood can cause serious damage to a building, meaning repairs to parts of the house or replacing some of your home’s contents may still be necessary.

If you live in a suburb that has suffered from flooding in the past, it’s wise to ensure you have flood cover as a part of your home and contents policy. It’s better to be safe than sorry and have a financial ‘umbrella’ over your house and possessions.

So, if you’re a homeowner or landlord, flood cover can be crucial in financially protecting your property and possessions against flood damage. Some types of flood cover may even cover the cost of temporary accommodation (for a limited time) if your home becomes uninhabitable due to flooding.

If you’re considering buying a home and contents insurance policy or reviewing your existing level of cover, you should ask your insurer the following questions:

  • Do I live in a flood plain, or could my house conceivably be susceptible to a flood event?
  • Does my existing policy cover floods unconditionally (i.e. are there any exclusions or restrictions to be mindful of)?
  • If my policy doesn’t include flood cover, could I add it to my insurance, and how much would it cost?

Compare home and contents insurance with Compare the Market’s free home and contents comparison service to find a policy that includes flood cover.

Does my property require flood cover?

Flood cover is not compulsory in Australia. However, having flood cover as a financial ‘umbrella’ for your home and contents is recommended, especially if you live in a flood-prone area.

That being said, no property is ever completely safe from flooding. Floods can happen in unexpected locations and rather quickly, sometimes even within minutes of heavy rainfall or a dam, levee or river break.

That’s why investing in a home and contents policy to protect against unexpected events like flooding is a safe bet. You can compare policies and prices with Compare the Market’s free home and contents insurance comparison service.

How much is flood cover?

Your premiums for flood cover will vary between insurers and policies and will be largely determined by:

  • The risk of flooding or water damage at your property
  • The expected depth of flooding relative to your building
  • The value of your home and assets
  • Expected costs for repairs, replacements or recovery
  • Your sum insured, excess amount and level of cover.

It’s worth noting that flood cover premiums are relative to the flood risk at a property. This means that if you live in an area with a high likelihood of flooding and where recovery costs are likely to also be higher, you’ll very likely pay higher premiums to reflect that risk.

You can find out how much you might pay for flood cover by comparing prices with Compare the Market’s free home and contents comparison tool.

Can renters and tenants get flood cover through contents insurance?

If you’re a renter, you could get flood cover as part of your contents insurance (sometimes called renters insurance), which can financially protect you from losses or damage to your belongings.

Whether you’re a renter, landlord or owner-occupier, you can compare home and contents insurance for free with Compare the Market.

Do flood mitigation measures help make flood cover more affordable?

Flood mitigation measures put in place by local and state governments can help reduce the cost of flood cover by minimising the risk of flood waters damaging properties. Of course, it’s no guarantee that damaging floods won’t occur, but every bit counts.

Sources

1 Flood. Geoscience Australia, Australian Government. 2018.

Stephen Zeller, General Manager

Tips from our home and contents insurance expert, Stephen Zeller

  1. When buying a property and getting a building inspection make sure that any previous flood damage is reported, even if repairs were made to the building.
  2. Clean out the gutters and keep the roof of your home maintained, as this can reduce the likelihood of storm damage claims.
  3. Many insurers send storm warnings via SMS. You can also get storm warnings through the Bureau of Meteorology’s BOM Weather app.
  4. Make sure you have a flood plan and have an emergency kit, especially if you live in an area that is susceptible to flooding.

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